Foxconn to Give Up Control of its Dormitories

Things have not been going particularly well for Taiwanese-based Hon Hai’s Foxconn factories in China. A rash of suicides recently brought an intense level of scrutiny from around the world to bare on the factory that produces some of the world’s best-selling, and best-known electronic equipment. Hon Hai then made a series of blunders that further enraged the people following the story, including an infamous letter to employees that asked them to sign a pledge to not kill themselves.

Eventually, the pressure on Hon Hai resulted in a promise to increase wages, in some case to more than double the current pay offered. At first it seemed like a generous move, but it soon appeared that the move was made without much thought to the repercussions, plus many continued to criticize the factory owners for not addressing the conditions that led to Foxconn being dubbed as a “sweatshop.”

As the PR nightmare continued to mount, Hon Hai declared that it was considering a “take our ball and go home” strategy, and might be moving the bulk of its manufacturing away from China to the heavily automated Taiwanese plants, and the Vietnam, where the wages are lower.

Now, Foxconn has addressed one of the many issues that human labor activists have criticized it for: the living conditions. Management of the 153 dormitories that house many of the more than 450,000 employees will now be handed over to local Chinese property-management groups.

“Providing employees with basic necessities including a safe and convenient place to live at the work-site might have been sufficient in the past, but this arrangement no longer satisfies the needs of the young migrant workers of today,” Terry Cheng, Foxconn’s corporate executive vice-president, said in a statement to Reuters.

The new housing would begin to charge rent, but Foxconn is preparing a housing allowance for its employees. No word yet on when the handover will be official, but the deal with Chinese-based property-management companies, Shenzhen CPM Property Management, and Kaiyuan Property Management has been agreed to.